Show Me The Data - Episode 4: Is Your Club a Good Investment?

Most members know their dues to the dollar. Almost none can say what their club is worth. Club Benchmarking’s data suggests that blind spot is costing a lot of clubs. Club Benchmarking founder Ray Cronin and CEO Dr. Jim Butler break down members’ equity, also called net worth or book value, and why they consider it the most important number in the business. They explain why the old refundable-equity model has largely disappeared. They also explain why a large share of clubs are worth less today, adjusted for inflation, than they were twenty years ago, even through one of the strongest stretches in club history. The cause is simple. A club’s operations break even, so its net worth grows only when capital income outpaces depreciation and interest. Along the way, they tackle the board member who runs on keeping dues low, why a club never cuts its way to success, and why “efficient” is not the same as “effective.” They also share the story of a corporate executive who knew the equity of his billion-dollar company by heart and had no idea what his club was worth. If you’re a member, a prospective member, or a board member, they leave you with two questions to ask: what is our club’s book value, and has it grown over the last 10 or 20 years?